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26. In rejoinder, Mr. Ganesh submitted that a mere property transaction cannot be a service. He submitted that even in the T.N. Kalyana Mandapam case it has not been held that a mere property transaction could constitute a service and that too a taxable service under the said act. He submitted that a mandap was not a bare piece of property but property with other furniture, etc. Moreover the service was to be provided by a mandap keeper as defined in section 65 (67) of the said act. The Supreme Court decision itself noted that a mandap keeper provided a bundle of services and it was not the case of a mere permission to use a particular property. The expression with or without other services appearing in paragraph 55 of the said decision does not mean with or without services but has a clear reference to "other services", other than the services provided by a mandap keeper such as catering services.

29. The counsel appearing on both sides have sought to place reliance on T.N. Kalyan Mandapam (supra), All India Federation (supra) and Doypack Systems Pvt Ltd (supra). It would, therefore, be necessary to examine these decisions of the Supreme Court. In T.N. Kalyana Mandapam (supra), the Supreme Court considered the issue of the taxable service provided by a mandap keeper. The said taxable service was earlier indicated under Section 65(41)(p) of the said Act. At present, with minor modifications, the relevant provision is Section 65(105)(m) of the said Act. Earlier, ‗mandap keeper' was defined under Section 65(20) and ‗mandap' itself was defined under Section 65(19). At present, ‗mandap keeper' is defined under Section 65(67) and ‗mandap' is defined under Section 65(66). There are only minor changes. As the provisions stood at the time of the decision of the Supreme Court in All India Federation (supra), the taxable service in question was:-

―Any service provided to a client, by a mandap keeper in relation to use of a mandap in any manner, including the facilities provided to the client in relation to such use and also the service, if any, rendered as a caterer‖; ‗Mandap keeper' was defined to mean a person who allowed temporary occupation of a mandap for consideration for organising any official, social or business function. Mandap was defined to mean any immovable property as defined in Section 3 of the Transfer of Property Act, 1882 and included any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organizing any official, social or business function. In the context of these provisions, one of the questions that arose before the Supreme Court was whether the tax imposed under the Finance Act on catering services did not amount to a tax on sale and purchase of goods. The Supreme Court held that the taxable service provided as a caterer by a mandap keeper was within the legislative competence of the Parliament and could not be construed as a tax on the sale and purchase of goods. In this context, the Supreme Court observed that it was well-settled that the measure of taxation cannot affect the nature of taxation and, therefore, the fact that service tax is levied as a percentage of the gross charges for catering did not alter or affect the legislative competence of the Parliament in the matter. The Supreme Court then observed as under:-

32. As noted above, Mr P.P. Malhotra, the learned Additional Solicitor General had placed reliance on the observation of the Supreme Court in T.N. Kalyana Mandapam (supra), which is to the effect that ―making available a premises for a period of a few hours for the specific purpose of being utilized as a mandap whether with or without other services would itself be a service and cannot be classified as any other kind of legal concept‖. But, we must not lose sight of the fact that the service provided by a mandap keeper is entirely different in nature to the service, which is in contemplation under Section 65(105)(zzzz). As noted in the Supreme Court decision in T.N. Kalyana Mandapam (supra) itself, the service of a mandap keeper does not involve transfer of movable property nor does it involve a transfer of any immovable property of any kind known to law either under the Transfer of Property Act or otherwise and, therefore, the said activity could only be classified as a service. In the present petitions, we find that there is a transfer of immovable property insofar as those properties are concerned where leases have been executed. Although the right of ownership is not transferred and is retained by the owner, the right of possession certainly gets transferred in the case of a lease. In the case of a licence also, the possession is of the licensee although the nature of such possession is only permissive. Thus, the observations of the Supreme Court in T.N. Kalyana Mandapam (supra) that the utilization of the premises as a mandap by itself would constitute a service would have to be distinguished from the kind of activity that is contemplated under Section 65(105)(zzzz). We are of the view that the case of a mandap and service provided by a mandap keeper would not be applicable to the case of renting of immovable property simpliciter. The Supreme Court in paragraph 56 of the said decision itself makes it clear that mandap keepers provide a wide variety of services apart from the service of allowing temporary occupation of a mandap. A mandap keeper, apart from the proper maintenance of mandap, also provides the necessary paraphernalia for holding official, social or business functions, apart from providing the conditions and ambience which are required by the customer, such as providing the lighting arrangements, furniture and fixtures, floor coverings, etc. The service provided by him, as indicated in the Supreme Court decision, cover the method and manner of decorating and organizing the mandap and the mandap keeper also provides the customer with advice as to what should be the quantum and quality of the services required keeping in view the requirement of the customer, the nature of the event to be solemnized, etc. It is in this context that the Supreme Court observed that the service of a mandap keeper cannot possibly be termed as a hire-purchase agreement or a right to use goods or property. It is obvious that there is a distinction between the services provided by a mandap keeper and the activity of hiring or giving on rent immovable property. The situations are different, the activities are different. The Supreme Court observed that a tax on services rendered by mandap keepers and outdoor caterers is in pith and substance, a tax on services and not a tax on sale of goods or on hire-purchase activities. We feel that this conclusion of the Supreme Court makes the distinction clear between the case of a mandap keeper and that of a person who rents out an immovable property for use in the course or furtherance of business or commerce. Consequently, the Supreme Court decision in the case of Kalyana Mandapam (supra) does not advance the case of the respondents. On the other hand, it does go towards clarifying the stand taken by the petitioners.